By: Ruth Olivares
Partner – LatinAlliance Guatemala
One of the main assets of companies is their intellectual property, however we can affirm that even in these modern times there are a large number of companies that are unaware of what intellectual property really is, so in this article we are going to define it to understand its full scope and the value it represents for companies today. Following this line of thought we can say that according to the World Intellectual Property Organization (WIPO) Intellectual property is defined as any creation of the human intellect, and includes inventions, literary and artistic works, as well as symbols, names and images used in commerce, legislation currently protects intellectual property through patents, copyright, the trademarks, trade names and expressions of commercial advertising, through which their owner can obtain recognition or gains for the inventions or creations. That is why intellectual property is currently recognized as one of the intangible assets most important for companies, since it constitutes about 80% of their value.
However, the current value of intellectual property has implied a whole process of evolution and development, thirty years ago these intangible assets were not so important, and it was not until the beginning of the era of globalization and technological development that companies decided to expand their horizons, expanding their products and services to new markets, which generated the concern of companies to protect their intellectual property, so that innovative ideas, innovative drawings and models, and brands were protected in accordance with the legislation that governed in each of the countries, with the intention of preventing any other company from using them for free, without any kind of limitations, and especially because with this protection, intangible assets acquire a specific value for companies.
Investors, stockbrokers and financial advisors are increasingly aware that intellectual property is a valuable asset for organizations, and many already include it in their balance sheets and financial statements, even as a result of this analysis the Companies have realized that their intangible intellectual property assets are more valuable than your physical assetsSuch is the case of well-known brands or companies dedicated to innovative products.
According to the report presented in September 2013 by the European Commissioner for the Internal Market and Services carried out jointly by the Office for Harmonization in the Internal Market (OHIM) and European Patent Office (EPO), the economic benefits of intellectual property protection are not theoretical but have become an extremely important intangible asset for companies. The value of these assets could in fact be estimated at 4,7 trillion euros or 39% of the European Gross Domestic Product (GDP).
For all these reasons, we can conclude that organizations frequently do not adequately value their intellectual property, underestimating the possibilities of obtaining future benefits thanks to its use. However, intellectual property can become a valuable asset for companies when it is protected in accordance with the law, since through it companies can generate income through licensing or commercialization of their products or services, and in event of a sale, merger or acquisition will most likely increase the value of your company to investors.